TD SYNNEX (SNX) Q2 2024 earnings summary

Executive summary

• Q2/FQ2 FY24 non-GAAP gross billings were $19.3B, up 3% year-over-year, with revenue at $13.9B, down less than 1%, and non-GAAP diluted EPS rising to $2.73, reflecting margin expansion and strong capital returns.

• Strategic Technologies, including AI, cloud, and security, grew in the mid-teens year-over-year and now represent 25% of total business.

• CEO transition announced: Patrick Zammit to succeed Rich Hume in September, with a focus on profitable growth and digitalization.

• Shareholder returns surged, with $288M returned in Q2 and over $500M year-to-date, including a 14% dividend increase to $0.40 per share.

• Launched IBM watsonx Gold 100 Program, received Microsoft Global Copilot Sales Champion Award, and named NVIDIA HGX design partner.

Financial highlights

• Q2/FQ2 revenue was $13.9B, down 0.8% year-over-year; non-GAAP gross billings grew 3% to $19.3B.

• Non-GAAP gross profit was $974M (6.98% margin); non-GAAP operating income $388M (2.78% margin); non-GAAP net income $237M.

• Non-GAAP diluted EPS was $2.73; GAAP diluted EPS was $1.66.

• Free cash flow year-to-date was $191M, with a full-year target of $1.2B.

• Returned $288M to shareholders in Q2 ($254M repurchases, $34M dividends); $453.4M repurchased in H1.

Outlook and guidance

• Q3 FY24 revenue expected between $13.3B and $14.9B; non-GAAP gross billings between $18.9B and $20.1B.

• Q3 non-GAAP net income guidance: $219M–$261M; non-GAAP diluted EPS: $2.55–$3.05.

• Gross billings for H2 expected to grow mid- to high-single digits; FY free cash flow target of $1.2B, with 50% to be returned to shareholders.

• Estimated Q3 tax rate of 23% and $75M in net interest expense.

• Sufficient liquidity and credit availability expected to support operations and debt repayment.